Faron Announces Clevegen Grant of European Patent

Faron Pharmaceuticals Ltd

("Faron" or the "Company")

Faron Announces Grant of European Patent for Clevegen

Patent protects the use of Clevegen, the Company's second wholly-owned asset, for the treatment of cancer, until 2030

TURKU - FINLAND, 1 February 2018 - Faron Pharmaceuticals Ltd ("Faron") (AIM: FARN), the clinical stage biopharmaceutical company, announces that the European Patent Office has granted Faron a European Patent (No. 2421888) for the use of Clever-1 antibodies, the mechanism behind Clevegen, for the treatment of cancer. Clevegen, Faron's second wholly-owned pipeline product, is a novel anti-Clever-1 antibody which causes changes in the immune environment of solid tumours by switching immune suppressive M2 macrophages to immune active M1 macrophages. Faron plans to initiate clinical Phase I/II Clevegen development in 2018.

The field of the patent invention is: an agent capable of modulating the Clever-1 receptor on the type 2 macrophage cell, that in addition to the mannose receptor, also expresses the Clever-1 receptor for use in the treatment of cancer.

This decision extends the existing patent estate for Clevegen until 2030. Additional IP around Clevegen's mechanism is being sought that could extend protection to the end of 2038.

Clevegen is based on Faron's Tumour Immunity Enabling Technology (TIET). Its unique mechanism of action, coupled with promising pre-clinical data and human ex-vivo data, has already indicated the product's potential in a broad range of indications. Clevegen's potential indications include immuno-oncology, chronic infections and vaccination enhancement, which all involve the presence of these same macrophages as immune suppressive cell type. As part of the stated strategy, Faron intends to expand its clinical trial program in order to broaden Clevegen's applicability and associated value.

The planned initial Phase I/II trial will target patients with liver, melanoma, ovarian and pancreatic cancer as part of an adaptive protocol design, which is currently under review by regulators, with feedback anticipated in 2018.

More details on Clevegen's manufacturing, regulatory and scientific progress, in addition to an update on the clinical development plan will be provided at an R&D Event on 21 February 2018.

Dr Markku Jalkanen, CEO of Faron, said: "The grant of this patent serves to protect the innovative mechanism underlying Clevegen, which will be important in realising the potential our second wholly-owned product promises. The target receptor Clever-1 is already patent protected but our wider strategy is to establish a broad portfolio of intellectual property for the Company and our pipeline products. We look forward to taking Clevegen into the clinic later this year and providing an in-depth update on its development at our R&D Event in February."

For more information please contact:

Faron Pharmaceuticals Ltd

Dr Markku Jalkanen, Chief Executive Officer

investor.relations@faron.com 

Consilium Strategic Communications

Mary-Jane Elliott, Matthew Neal, Philippa Gardner, Lindsey Neville

Phone: +44 (0)20 3709 5700

E-mail: faron@consilium-comms.com

Westwicke Partners, IR (US)

Chris Brinzey

Phone: 01 339 970 2843

E-Mail: chris.brinzey@westwicke.com

Panmure Gordon (UK) Limited, Nomad and Broker

Freddy Crossley (Corporate Finance)

Tom Salvesen (Corporate Broking)

Phone: +44 207 886 2500

About Clevegen®

Faron´s preclinical drug development project Clevegen revolves around Clever-1, a cell surface receptor expressed mainly by endothelial cells and monocytes/macrophages. Clever-1 is involved in cancer growth and spread. The active pharmaceutical ingredient of Clevegen is a humanised anti-Clever-1 antibody.

Clevegen, by binding Clever-1 prevents Tumor Associated Macrophage (TAM) infiltration into a tumour and blocks TAM-to-Tumour cell interaction triggering TAM transformation into tumour supportive cell types. It therefore reduces suppression of the human immune system and converts the whole immune environment around a tumour to immune stimulating allowing a patient's own immune system to combat cancer, known as "immunotherapy". Clevegen has a local tumour effect which also allows the cell-mediated immune response to attack infections in normal tissues and removal of immune suppression locally also limits risk of autoimmune reaction, a potentially severe side effect observed with some immune checkpoint inhibitors. The Directors of Faron believe that Clevegen is well differentiated from competing products as it specifically targets M2 TAMs which facilitate tumour growth, while leaving intact the M1 TAMs which support immune activation against tumours. Clever-1 blocking results especially in activation of Th1 mediated immunity.

About Faron Pharmaceuticals Ltd

Faron (AIM:FARN) is a clinical stage biopharmaceutical company developing novel treatments for medical conditions with significant unmet needs. The Company currently has a pipeline focusing on acute organ traumas, vascular damage and cancer immunotherapy. The Company's lead candidate Traumakine, to prevent vascular leakage and organ failures, is currently the only treatment for Acute Respiratory Distress Syndrome (ARDS) undergoing Phase III clinical trials and in 2017 received advice from US FDA to proceed directly to BLA submission following completion of EU and Japanese Phase III studies. There is currently no approved pharmaceutical treatment for ARDS. An additional European Phase II Traumakine trial is underway for the Rupture of Abdominal Aorta Aneurysm ("RAAA"). Faron's second candidate Clevegen is a ground breaking pre-clinical anti-Clever-1 antibody. Clevegen has the ability to switch immune suppression to immune activation in various conditions, with potential across oncology, infectious disease and vaccine development. This novel macrophage-directed immuno-oncology switch called Tumour Immunity Enabling Technology ("TIET") may be used alone or in combination with other immune checkpoint molecules for the treatment of cancer patients. Faron is based in Turku, Finland. Further information is available at  www.faron.com